Bermuda's Cost of
Living Guide

Consumer facts for
residents and visitors

To refer to
this file use "bermuda-online.org/costoflivingguide.htm"
as your Subject

Bermuda cost of
living overall

The World Bank rates
Bermuda as the most affluent countries in the world. But also be aware Bermuda's cost of
living is one of the highest in the world. This is not in any way intended to
deter you from coming, simply to alert you in advance to the fact that Bermuda
is far more expensive a place to live and work than you'll be told by many
head-hunters and recruiters based in other countries who have not actually lived and worked in
Bermuda themselves recently or at all.

Overall, Bermuda costs of living are more than three times those of
the USA, 280% more than in
Canada and 200% more than in UK. Unfortunately, organizations such as Hogg Robinson and Mercer Human Resource Consulting,
completely exclude Bermuda - and similar, competitive offshore business jurisdictions -
from their lists of costs of living by place.

Being forewarned about
cost of living prices below will enable you to negotiate more
accurately with a prospective Bermuda employer for a realistic starting salary and
benefits package to enable you to balance your monthly budget and match it to
what you can afford. It's far better to know upfront what to expect so you are
not surprised but can plan accordingly than to be dismayed by revelations after
you arrive that were omitted. Bermuda's charms can be very
attractive to those who can command high salaries to help offset the extremely
high costs of living. But for those not earning those high
salaries, say under US$88,000 a year where they are now employed, they might be far
better off overall staying where they are than in moving to Bermuda on a Work
Permit. Why? Simply because most people expecting upward mobility go abroad to places like
Bermuda and rightly expect better accommodation and conditions than they have
now.

There is no official Cost of
Living Index provided by the Bermuda Government (nor is there one in the USA).
In Bermuda, the Consumer Price
Index (CPI) program is the closest thing. It measures changes over time
in what urban consumers pay for a basket of goods and services. According to the
US Bureau of Labor Statistics (BLS), the CPI is the most widely used measure of
inflation. The CPI frequently
is called a cost-of-living index, but it differs in important ways from a
complete cost-of-living measure. BLS has for some time used a cost-of-living
framework in making practical decisions about questions that arise in
constructing the CPI. A cost-of-living index is a conceptual measurement goal, not a straightforward alternative to the CPI. A cost-of-living index
would measure changes over time in the amount that consumers need to spend to
reach a certain utility level or standard of living. Both the CPI and a
cost-of-living index would reflect changes in the prices of goods and services,
such as food and clothing that are directly purchased in the marketplace; but a
complete cost-of-living index would go beyond this to also take into account
changes in other governmental or environmental factors that affect consumers'
well-being. It is very difficult to determine the proper treatment of public
goods, such as safety and education, and other broad concerns, such as health,
water quality, and crime that would constitute a complete cost-of-living
framework.

Bermuda's Cost of
Living main factors include

Before coming to Bermuda, potential newcomers
should make their own comparisons, by
comparing Bermuda's costs with where they live now. Bermuda costs of living are more than three times those of
the USA, 280% more than in
Canada and 200% more than in UK.

Hugely
expensive by international standards, equivalent to those in downtown New York,
London and Paris. Buying. In Bermuda, non-Bermudians can only buy one of
the most expensive homes. Figure on at least $3.5 million, compared to $225,000
in Boston, MA. Annual Property taxes for non-Bermudians are the highest
in the world, sometimes in excess of $80,000 pa, compared to £1,300 sterling in
the heart of London, England. Renting.
Excluding utilities. At least three times more to rent a house or apartment
or condominium in Bermuda than in most of the USA, Canada and UK. The average
2014 rental price
of a one-bedroom property is
$2,389, a two-bedroom $3,551 and a three-bedroom $5,403.Location
and scenery are among the most significant factors. Note that
average price is usually without a beach nearby or view or pool. Expect to pay appreciably more to live in one of the choice
modern apartment blocks in or near the City
of Hamilton, or in an apartment or house near a beach or with nice
sea view and pool access. Some newcomers receive a housing allowance from their employers.
Better employers, usually international not local, now do this
routinely. The
rental market is always busy.There is always interest
in the $4,000 monthly and below market but these apartments are not
usually in the desirable near-Hamilton or in the city area. Newcomers are advised not to pay any more than 28% of their salary on
accommodation if they do not receive a partially compensatory housing
allowance. Utilities are always extra unless specified in a written
rental agreement. Accommodation costs can be much less onerous if employer
offers a housing allowance. Many Bermuda-based international employers now do this routinely for their
imported staff. Affordable
housing. By this is meant low-cost housing for and purchased by
qualified Bermudians. ( Not applicable to newcomers who are not
Bermudian and don't qualify unless a spouse is Bermudian). Most monthly
rental agreements will stipulate that tenants, not landlords, are responsible for all
periodic internal painting and upkeep but landlords will do external maintenance
and upkeep.

Apartment or house rental
agreements. Standard monthly
rental agreements - not leases - can be purchased but they should be viewed
carefully before they are signed by a tenant and landlord.

Things newcomers should always
confirm include:

If a standard rental agreement
does not say that the tenant can park his or her own car on the premises,
this should be discussed by both tenant and landlord. In most cases, you
should have no problems. But where they apply, avoid like the plague
premises where such a basic right is not offered. It will generally mean one
of two things, either that the apartment is not legally registered as a
separate apartment - in which case, you cannot legally have a car on the
property - or that the landlord has assigned the property to another person
(not his tenant) to keep a car there, at your expense.

Whether the premises were
house wired recently, both for regular domestic use and for
telecommunications. Can you merely plug in to a wall outlet a cable
television in a bedroom, living room and kitchen? Can you move a regular
telephone anywhere? Will you be able to order and get high-speed Broadband (DSL) Internet service?
If not, the wiring is old and
may not to be replaced at huge expense and inconvenience.

Is the hot water heater recent
or how old and if old, how old? Will the landlord pay for repairs or
replacements of any older unit? A plumber can take over two weeks to come.
He might promise to come but not turn up a number of times. Not checking
these matters may be both costly and involve a considerable wait and stress
for repairs or service.

Another common factor is
noise. Stress to your landlord that you want peace and quiet, not noise from
neighbors whose indoor or outdoor parties involve amplified music at a
high volume level. You will want your windows open from time to time.

Home and Household
insurance is very high. Only local majority-Bermudian-owned
insurers can be used. For example, a small (1250 square feet) 2-bbedroom
detached cottage in Paget costs $3200 a year with Argus, compared to a 3 bedroom 1,750
square foot detached bungalow in the UK that costs £120 sterling.Average
home insurance costs, huge by UK standards, are just for
the building, not the real estate or contents which are extra.
All home
insurance must by law be with a reputable local insurer.Insurance
should always include hurricane and windstorm protection. In Bermuda,
hurricane season officially starts on June 1 and ends October 31, but
this is variable.If
in a valley or otherwise not elevated and near the coast, flood
insurance is recommended. Every few years a local insurance company
initiates raising the insured value of the house. The system in Bermuda
seems to be quite different to home insurances in the UK or USA or
Canada, etc. in several significant ways. Overseas, homeowners are
encouraged to insure their properties for what they deem to be
replacement or market value. In that area alone in Bermuda, a property
may be close to or exceed 1M at present but the costs of rebuilding
after a hurricane or fire may be much lower because the foundation,
tank, cess pits and walls are likely still up. So from their perspective
in Bermuda, a lower or medium-priced building with a market value of say
$1.2 million may be insured for only about 491K rebuilding cost
indicated on the policy, to return the house to the same pre-catastrophe
condition. Prospective non-Bermudian owners of Bermuda real estate
should always check with their local insurers about home insurance and
those from the UK must also be prepared to pay up to ten times in
Bermuda what they pay in the UK. As an example of this, one Bermudian
who lives in the UK can pay no more than about $300 a year for a
$491,000 home, including $30,000 for contents. But his family in Bermuda
can easily pay $2,340 a year for a similarly detached stand-alone
Bermuda property also insured for $491,000 with contents of $30,000.
The above relate to buildings and contents insurance. Most working
non-Bermudian professional newcomers won't own their Bermuda homes but
rent them so may need only contents insurance. The cost of this
should be ascertained and compared with their costs back home.

Real Estate
taxes. See more details under Property taxes. Payable by
owners of non-Bermudian apartments, condominiums and houses, at rates appreciably more in Bermuda than in the USA, and Canada - usually
passed on indirectly to renters in rents.

Renting a house or apartment
(flat). About 200-300% more than in most American cities and about the same
as renting an equivalent size unit in New York City or central London.

Alcoholic beverages

There are no locally made alcoholic
drinks. All (including rum) are imported.

Air Conditioning

Essential in Bermuda from May to
October to live comfortably at home or in the office. Regular air conditioning
units and more expensive but more versatile ductless mini split systems are
available. Will add significantly to the cost of your electricity.

Automobile
annual licensing

For more information see under "Annual Vehicle License
Fees" in http://www.gov.bm/portal/server.pt?open=512&objID=253&&PageID=477&mode=2&in_hi_userid=2&cached=true.
Costs are the highest in the world by a very wide
margin for private cars. Up to 10 times more costly than in the USA or
Canada and appreciably more expensive than in the UK (where the 2015 annual
licensing cost of a Ford Kuga is £180, a Honda CRV £145, Nissan Qashqai
£0 and VW Tiguan £145). Unlike in the UK, in
Bermuda new smaller environmentally-friendly cars do not have free annual
licensing. In Bermuda, a Class E vehicle is rated
in the USA and Canada as a medium-size car. Plus, in Bermuda only one car
per household is
allowed, with new ones at about twice USA prices. Tourists may not rent cars and
visitors who have driver's licenses in their home countries cannot use them in
Bermuda to drive cars belonging to their Bermuda-based relatives or friends. Nor
is car leasing allowed.

Automobile Insurance. Based on a reputable
local insurance company written quote of $1,894.26 annually for
comprehensive coverage with a deductible, for a very small car. Actual premiums can vary wildly.Rates
can vary considerably in Bermuda, where Only a Bermudian insurance
company can insure a vehicle. For a list of Bermudian insurers see under
"Insurance Companies, Local" in Bermuda
Employers. See how they compare in prices to American insurers,
at http://www.insure.com/car-insurance/most-and-least-expensive-states-2013.html.

Boats

Expensive to buy
new, due to a significant government import duty. See under "Boats" in Watersports.

Cable and satellite TV

More than
twice US prices but about the same as in UK (and with far more useful
channels than in UK).

Child support
and welfare

Costs
are very high. Bermuda, despite being nominally British, does not offer any
UK-like child birth and/or child-support payments to parents.

Cigarettes and
tobacco products

Cigarettes are well over $70 a carton. From April 1, 2013 the Bermuda Government's import duty
alone on them is $44 a carton. Cigars are very expensive.

Clothing

Costs are much
higher than in Canada, USA or UK.

Customs (import) Duties for
returning residents or visitor

Returning Bermudians,
residents and visitors should expect to pay Bermuda Government import duties on purchases overseas
at a much higher rate - about 300 to 500
percent higher overall - than in the USA, Canada and United Kingdom. Here, your duty allowance is only US or BDA
$100
(it used to be $400 until the mid 1990s) per person per month, whether for
individuals or families. It is by far the least generous place in the
Northern and Eastern hemispheres in terms of import duty allowances. If you acquire and import goods of a greater value, the great majority of tourists
and locals pay about 35 percent of the receipted or Bermuda Customs assessed
value of what you bring back.Newcomers should expect to pay
this too. In UK, USA, Canada, Australia, New Zealand, newcomers are usually
exempt from Customs Duties on what they arrive with and ship in. But not in
Bermuda.For example, if you are Canadian,
a stay in Bermuda or elsewhere entitles you to up to a Canadian $ 700 allowance.
If you're from the USA and have been in Bermuda for at least 48 hours, you're
entitled to a duty free exemption of $800 per person on returning home.
Additionally, gifts under $50 in value may be sent home, to people other than to
yourself, every 24 hours, duty free. And antiques (over 100 years old), prints,
maps, coins and stamps are all duty free. Duty free allowances and exemptions
don't prohibit you from buying more. Nationals of EEC countries
visiting another EEC country and returning to their own have a very generous
duty-free allowance.When duties apply in your own country on
goods purchased in Bermuda, you'll often find them very reasonable.

Private School
fees.
High. If you have a child or children and don't want him/her/them to go to a
Government school. Costs are very high for private schooling at pre-primary,
primary, secondary level. Government schools (public schools) are free to
Bermudians and some non-nationals if they accept the multi-racial conditions and
generally a lower standard. There is a community college that is not free. It
awards associate degrees. There are no Bermuda-based universities. Most
Bermudian and non-Bermudian residents send their children to universities in the
USA, or Canada or the UK, in that order of overall preference.

Electricity and
LP Gas

Budget at least $330 a month per small family unit, based on 730 kWh per month in May
2014, very expensive by international standards, more if also with a kitchen gas
stove. LP gas per cylinder is about 4 times the US price.

Gasoline and
diesel for private cars

Costs
are enormous, compared to Canada and UK, about the same as in USA for working
newcomers below retirement age. Bermuda has no
equivalent of the UK's or Canada's National Health Service and unlike the UK
does not offer free doctor's visits, free hospitalization, free surgery, free
prescriptions for the over and under 65s. Local taxpayers pay not just
once but several times for healthcare, namely (a) for the rebuild of the King Edward VII Memorial
Hospital; (b) the operational costs of the Bermuda Government's Ministry of
Health; (c) for employer/employee health and hospital insurance. Only local majority-Bermudian-owned
insurers can be used. Bermuda, despite being nominally British, follows the
American pattern of charging for general healthcare, general practitioner
consultation rates, healthcare/medical insurance, hospitals private ward daily
rate and medications. There are separate charges for dentists.

Household and
Housing

See
under Accommodation.

International
investments bought locally

What will cost
you $8 per trade in the USA, or via an overseas online investment
broker, will be about US $29.95 if bought in Bermuda, one of the accurate reflections
of the differences in the cost of living.

About three
times more than in USA or UK or Canada for equivalent Broadband upload
and download speed.

Legal costs

are very high, averaging in Bermuda about $600 an hour.

Newcomers estimated expenses

It has long been said - inaccurately -
that Bermuda is tax free. In fact, it has a combination of direct taxes (payroll
tax on income, paid by employers and employers) plus a huge range of very high
and non-deductible indirect taxes paid by every consumer rich or poor, young and
old. Newcomers should know payroll and general living taxes combined
translate into a 20% tax as a percentage of income. The following list should be
useful.

All prices are in USA or Bermuda
dollars unless shown otherwise specifically and are monthly, or pro-rated.

Automobile annual
licensing

From $525.00 pa

For a
medium-size car by Bermuda standards (compact in
USA). Very significantly higher than in USA or Canada or UK.

Automobile
insurance

$290

See under Bermuda's Cost of
Living main factors

Automobile
cost, gas
(gasoline, petrol) and commuting costs

$520

Including
depreciation, gasoline or petrol
at US$1.85 a liter - mostly
because of a huge Bermuda Government import duty - and workday parking.
To compare, gasoline in Bermuda and
the UK is about the same price, hugely more than in USA and Canada

Books, magazines, newspapers

$160

Local and international

Cable
television

$155

Full service,
all movie channels, several TV sets

Clothing and shoes

$190

Acquired locally

Company
Pension

$470

Deducted by
employer for a contributory corporate pension, approximately based on a
salary of US 79,692 a year

Credit Card
payments

$390

International
and local charge-cards.

Deductions
from paycheck

Varies hugely

For newcomers, about 15 percent of an employee's monthly gross salary is deducted by the
employer for the employer's portion of the Bermuda Government's Payroll Tax,
Company Pension, Bermuda Government's Social
Insurance, Life Insurance if provided by the employer and Health Insurance.

Applies if you
have children of school-attending age and send them to a local private
day school

Electricity

$300

Excluding air
conditioning May to September. A three bedroom two or three bathroom house will
cost at least $400 a month with air conditioning.
Much of the local price is because of a huge Bermuda Government import
duty, plus a Fuel Adjustment charge of 25%.

Food,
groceries

$740 per
person or $900 for 2 or $1300 for 3

See separate
paragraph below for more details. Food shopping,
including liquor (much of the local retail price of which - averaging
$26 a liter - is because of a huge Bermuda Government import duty). But USDA approved meat may be
less expensive in local grocery stores than in Toronto. Excludes amount
for alcohol and cigarettes or cigars

Grooming

$140

Hair cutting
and other. Here, a basic man's hair cut costs from US$28 a time at the
cheapest place plus gratuity and a woman's -
with no perm - from $75 plus gratuity. Government has a 22.5% at
wholesale level tax on all personal grooming products.

Health
Insurance, major medical, usually only until 65 or termination,
whichever sooner

from $600 per
month

Avoid the
basic, not good value for money Bermuda Government administered Hospital Insurance Plan (HIP). Go
instead for your present employer's plan, offering coverage, usually
with some exclusions (deductibles) for a single
person with no spouse, or unemployed spouse or unemployed spouse and
young children. You cannot otherwise vary an employer's plan.
Expect to pay 50 percent of
what is offered by an employer.

Home
entertainment

$250

Purchase of
televisions, stereo, CDs, DVDs, etc.

Household
insurance

$340 per month

If renting a 1 bedroom apartment

Internet
access, personal

$139.95

Unlimited ADSL (Broadband)
at 8 MB speed

Life insurance

$95

Through a
local employer, covering approximately twice annual salary of US$80,592.
This excludes the cost of other life or term insurance you may have
which is not employer based

Medical
contingencies

$280

For items not
or only partially covered by Health Insurance, such as doctor's visits,
dentistry, prescriptions

Movies

$95

At local theaters

Newspapers
(local)

$59.25

To keep up
with the news

Other

$500

Contingencies
or memberships. For example, see "Professions Supplementary to
Medicine" below. Much more if you pay for memberships of beach
clubs or golf clubs or tennis clubs or yacht clubs

Overseas
purchases tax

$195

Overseas, duty
free allowances on imports are very generous (ie EU, USA of $800,etc)
before nominal tax. But in Bermuda they are only $100 per resident per
trip and very high - nearly 30%- after 1st $100 per person.

Payroll Tax

$450

Bermuda Government payroll tax purposes is
a percentage of gross salary, with an employer liable for 50 percent of the amount payable by
the employer. Amount here is for an average salary.

Real Estate
Tax

see "Real
Estate Taxes"

Not for
renters but owners (but built in to rents)

Social
Insurance (local social security)

$220

Compulsory,
payable by employee with a matching amount from employer, regardless of any employer-provided pension coverage.
Self-employed persons pay for both employee and employer. This Employed persons over 65 pay nothing
but their employers do. When newcomers leave Bermuda they should
write to the Department of Social Insurance to see if they qualify to
claim back what they paid in.

This is purely a guide, to show
private sector employers and employees what the Bermuda Government does for
certain staff. Some private sector employers may also follow this policy, or
offer rent allowances instead, if appropriate.

When it employs expatriates,
return travel for
candidate, spouse and up to two children if appropriate and shipping and resettlement
allowances are provided by the Bermuda Government. Because of the high cost of
living in Bermuda and the finite resources in a very small land area yet with
one of the highest populations anywhere per square mile or kilometer, families with more than two children
are not normally approved. Employment for a spouse is sometimes available (especially if the
spouse has a professional qualification) but is not guaranteed.

For newcomers it
employs, the Bermuda
Government assumes responsibility to find suitable, furnished accommodation for
contract officers (one bedroom for a single or married person, three bedrooms
for a family with two children), and rent in excess of 25% of the contract
officer's salary is fully subsidized. Candidates are expected to remain at the
accommodation provided for at least three months but thereafter may choose to
move into accommodation of their own choice. Rent in excess of 25% of the
employee's salary will continue to be subsidized within reason.

But newcomers to Bermuda should
note that each year, Bermuda Government bursaries are awarded to selected
Bermudian applicants undertaking a course of study at a university, college or
training institution in order to acquire professional or technical
qualifications specified by the Cabinet as essential or desirable for
appointment to offices in the Public Service. The annual allowance is
accompanied by provisional undertaking of employment in the Public Service upon
successful completion of the course of study.

There is also a supernumerary
program. A supernumerary trainee is a Bermudian who is professionally and or
technically qualified in a chosen career and needs post-qualification
experience. Supernumerary officers are given favorable consideration for
appointment to positions held by contract officers. There are now over forty
trainees studying in various fields in the Bermuda Government.

Overseas
newspapers

Available, sometimes
a day later, at 2-3 times
published prices in place of origin.

Poverty indices

In this context it is significant, when
considering costs of living overall, to compare the financial definitions of
poverty existing between Bermuda and the USA. In Bermuda, the
poverty line has been established since 2008 as an income
of less than $27,000 per annum for a single person and $76,000 for a
two-parent family with two children under 16.

The 2013 Poverty
Guidelines for the
48 Contiguous States and the District of Columbia

Persons in
family

Poverty
guideline

1

$10,830

2

14,570

3

18,310

4

22,050

5

25,790

6

29,530

7

33,270

8

37,010

For families
with more than 8 persons, add $3,740 for each additional person.

Public transport

By bus or ferry is exceptionally good
for such a small island (only 21 square miles in total land area). And not
overly expensive, but commuter buses are invariably crowded, especially at peak
rush hour times and, in the case of ferries, when cruise ships are
visiting.

Restaurants

Costs are very high.

Salaries and
earnings

Senior executives of insurance companies
can earn millions of
dollars annually, plus have stock and other bonuses and benefits
galore.

The average starting salaries in a
Bermuda-based but international or exempted company - for middle management
positions - is at least
BDA or USA$150,000 a year, gross. Those concerned will be appropriately
degreed and professionally accredited.

For those in less senior
positions, BDA or US$88,350 a year is the minimum basic salary figure
recommended, below which it may not be practical to relocate to Bermuda for
the period of the Work Permit. Some serious thought should be given by expatriates on
whether or not it is feasible to come. For example, a professionally qualified
person who is 33 years old, earns 45,000 pounds sterling a year in the United
Kingdom and pays only 500 pounds a month for a 2-bedroom flat, may not find it
practical to relocate to Bermuda.